Healthcare Reform Blog > July 2011 > The Carrot and the Virtuous Cycle

The Carrot and the Virtuous Cycle

Lyda PhillipsContributor: Lyda Phillips
Topic: Accountable Care Organizations

Considering an accountable care organization is like taking a Rorschach test: everyone sees a different image, Mark McClellan, director of the Engelberg Center for Health Care Reform at Brookings, told hundreds of healthcare leaders gathered at the Second National Accountable Care Organization Summit in Washington, D.C.

The event held at the historic Omni Shoreham Hotel to discuss all things accountable, sponsored by the Dartmouth Institute for Health Policy & Clinical Practice and the Engelberg Center, brought together elite health systems and small physician groups, academics and bureaucrats, actuaries and editors to debate the great shifts taking place during this sea change in healthcare.

The understatement of the summit may have come from Carol Backstrom, senior policy adviser in the Center for Medicare & Medicaid Services’ Minneapolis office, who termed the current state of agitation over formation of ACOs “a bit of a messy time.”

The conference provided a wealth of practical detail from providers in the trenches, who cited figures, strategies and actuarial realities based on their own experiences.

But after two days’ immersion in the most advanced thinking on ACOs, it became clear that some things that had been ever so “in” were now quite “out.” The favorite phrase of cost-shifting, “skin in the game,” was gone, gone, gone, replaced by “patient engagement,” that is, giving patients financial incentives to improve their own health. Also falling into disrepute is the term “patient-centered medical home,” because surveys show people associate that term with nursing homes. Instead, if you’re in the know, you now call the same critter “advanced primary care.”

The overarching themes of the conference were the need for linking patients with fewer, more consistent caretakers; a focus on the most expensive patients to control costs; and the need for a source of data other than payer claims for both pricing episodic payments and guiding outcomes improvement. Finally, speaker after speaker urged providers to address not just medical concerns but family and societal factors as well, i.e., population management. As David Bronson, president of Cleveland Clinic Regional Hospitals, put it: “The only way to bend the cost curve is to bend the pipeline.”

The takeaway can be boiled down to the buzzword of the day, “virtuous cycle.” When an innovation in care delivery or reimbursement creates cost savings combined with higher value, this creates a “virtuous cycle,” which with every round creates yet more savings and even better outcomes. The carrot of incentives, for both patients and providers, is a key to kick-starting a virtuous cycle.
 

Posted on: 7/1/2011 1:40:49 PM | with 0 comments


Tags: Accountable Care Organizations

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